Major league baseball has made a new proposal to the baseball players’ association to resume the 2020 season that scraps the sliding scale that they had previously offered, but still does not come close to the prorated salaries that the players insist that the parties had agreed in March.
The latest proposal calls for a schedule of 76 games to be played from July through September 27, with playoffs being concluded by the end of October. Players would receive $200 million additional money if the playoffs are concluded.
Players would receive 75 percent of their prorated salaries, which is 35.1 percent of their full salaries, if the playoffs are concluded. If the post season is not concluded, players would receive 50 percent of their prorated salaries, which is no more than 25 percent of their full salaries. The previous proposal from MLB would have given players reductions on a sliding scale of prorated salaries for 82 games. The biggest difference in proposals is in revenue paid to players for the post season.
A lesser, not insignificant detail of the offer includes elimination of compensation for signing free agents after the season, in what figures to be an ice cold market. This would affect just a handful of players at the top of the pay scale.
The proposal may not include expanding the playoffs to 14 teams, which is something that both sides have proposed to each other. Still, this can only happen with agreement of the players. Bob Nightengale of USA today tweeted that players would be required to sign waivers of liability due to the pandemic.
Initial reaction from the players is said to be tepid at best. Players are believed to be more inclined to accept prorated salaries for a shorter season than to reduce their salaries to a less than prorated percentage. Evan Drellich of the Athletic tweeted this:
MLB’s first offer to the union included about $1 billion in regular season and another $200 million in postseason. This offer basically doubles amount of postseason money, to more than $400 million. MLB points to potential total dollars as improvement. Union sees other factors.
Mike Axisa of CBS sports tweeted that MLB’s latest offer represents about the same percentage of salary being paid, although it’s dressed up differently:
- 82 games at sliding scale = ~33% salary
- 50 games at prorated pay = ~33% salary
- 76 games at 75% prorated pay = (drumroll) ~33% salary
It all comes back to the same place. MLB keeps making the same offer in different forms.
The agreement reached in March calls for players to receive prorated salaries, but also states that “MLB and the union will discuss the economic feasibility of playing games at neutral sites or without fans”. Owners have insisted that this requires a modification of the prorated formula, while players insist that they want prorated salaries paid.
MLB has been threatening to unilaterally impose a shortened season of 48 games, paying the players prorated salaries. In that case, there would be no expanded playoffs, and the players would almost surely file a grievance. The March agreement states that “MLB will propose a schedule “using best efforts to play as many games as possible, while taking into account player safety and health, rescheduling needs, competitive considerations, stadium availability, and the economic feasibility of various alternatives.”
The owners claim that they would be losing money with each game played, but, as always, refuse to open their books for scrutiny to demonstrate this claim. The players don’t believe it. If the owners were to use finances as a reason to claim that a longer season is not possible, the players would almost certainly file a grievance, requiring the owners to open their books to prove their claim. In that sense, the players believe that they are calling the owners’ bluff.
While MLB’s proposal has abandoned the expected proposal for revenue sharing, which has been a line that the players have refused to cross for decades, it still puts forward the requirement that players share the risk of a lost season, or lost post season. Owners have reaped the benefits of soaring revenues for years without sharing the profits with players, as salaries have not nearly kept pace with revenues, which are now more than $10 billion per season.
One positive aspect of the offer is that it is at least an offer. MLB had previously indicated that they rejected the players’ latest counter proposal and would not be making another offer. That position would have required the players to essentially negotiate against themselves if any progress was to be made toward a negotiated settlement. The players may now make a counter offer in an effort to narrow the gap.
There is no mention of deferred salaries in the latest proposal, which is significant since the players had opened the door to the possibility in their last offer. While the offer was limited to the case of cancelled playoffs and contained interest of 6 percent, it was nonetheless put on the table, and seen as one possible avenue to move toward a settlement. But the owners are insisting on slashing salaries tied to lost revenue.
The owners’ claim that they would be losing money by playing more games can only be true if revenue from television contracts is guaranteed whether or not games are played during the regular season. Television revenues total some $5.3 billion, which is greater than player salaries which is about $4 billion for major league players. Under $800 million of that revenue is tied to the post season. If TV revenues are prorated, MLB would not be losing money.
If MLB is in fact “losing” money by playing more games, it is because they have already been guaranteed payments for playing games which they now propose to not play so that they can reduce player salaries. In that case, they’ve got more than just the players to be concerned about.